DRVN Stock Plunges 30% After Revealing Accounting Errors

DRVN Stock Collapses 30.2% After Financial Restatement

Shares of Driven Brands Holdings Inc. (NASDAQ: DRVN) collapsed on February 25, 2026, after the company disclosed it would need to restate its financial statements. The stock plunged $5.01 per share, a 30.2% single-day drop, closing at $11.60 from a previous close of $16.61. The sharp decline was a direct market reaction to the company's admission of numerous material accounting errors and a corresponding delay in filing its 2025 Form 10-K.

The announcement confirmed that financial statements for fiscal years 2023 and 2024, along with quarterly reports for 2025, were unreliable. Driven Brands also revealed the existence of material weaknesses in its internal controls over financial reporting, signaling deep-seated operational issues to investors and triggering a wave of securities fraud lawsuits.

Lawsuit Alleges Years of Inaccurate Financial Reporting

Class-action lawsuits filed against Driven Brands allege that the company made materially false and misleading statements for nearly two years. The complaints detail a wide range of accounting failures, including errors in recording leases, which impacted the company's balance sheet assets and liabilities. The core of the allegations centers on inaccurate reporting of cash balances and operating cash flows.

According to the legal filings, these errors led to the overstatement of cash and revenue and the understatement of selling, general, and administrative expenses for fiscal years 2023 and 2024. Further allegations include the improper presentation of supply expenses and improperly recognized revenue within its ATI business, primarily in fiscal year 2025. These collective failures painted a deceptively positive picture of the company's financial health and operational performance.

Investors Sue Over Losses During Two-Year Class Period

Multiple law firms are now seeking to represent investors who purchased DRVN common stock between May 9, 2023, and February 24, 2026. The lawsuits, filed in the U.S. District Court for the Southern District of New York, aim to recover damages for shareholders who suffered significant losses following the company's disclosures. Investors who wish to serve as a lead plaintiff in the litigation must file a motion with the court no later than May 8, 2026.